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Retail engagement platform Netree on Tuesday called for further rationalisation of the goods and services tax (GST) by restricting the number of tax slabs at two to promote the retail sector growth as too many slabs create compliance burden for small and medium retailers.
“Rationalisation of GST should be done with just one to two plainer slabs along with simplification on account of filing of returns,” Desi Valli, founder and CEO of Netree, said in a statement.
He also urged the government to look at simplifying the procedures for filing returns.
Too many slabs create compliance burden for small and medium retailers, he said.
“As we need to deal with all the stakeholders in retail value chain, simplification of procedure will make the compliance easier and error free,” Valli said.
Further, Valli demanded tax incentives on digital payments for small and medium retailers to be announced in the forthcoming budget to promote digital transactions.
“Government must propose separate funds to organise start-up meets to enable various stakeholders to meet and explore opportunities,” he added.
(With PTI Inputs)

Government mulls tax concession limit by start-ups on angel funding

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The government is considering setting a limit for availing tax concession by start-ups on investments from angel investors, a government official said. The move could help promote budding entrepreneurs in the country.
Several start-ups have raised concerns related to taxation of angel funds under the Section 56 of the Income Tax Act, which provides for taxation of funds received by an entity. As many as 18 start-ups have got notices from tax authorities.
Also read: Why do angel investors want Arun Jaitley to turn their angel this budget?
“The idea is not to tax risky investments. So we are trying to make a mechanism for that. We will be coming out with a notification soon on this and another notification will be issued by the IT department,” the official said.
Start-ups in the recent past had flagged their grievances to the government regarding angel tax provision, which, they considered, was not friendly to them.
An angel investor is the one who funds a start-up when it is taking baby steps to establish itself in the competitive market economy. An angel investor normally puts in Rs 2 to 4 crore only.
The government is also mulling to extend these benefits with retrospective effect to certain start-ups, the official added.
These instances are dealt under section 56(2)(viib) of the I-T Act.
It provides that where a closely held company issues its shares at a price which is more than its fair market value, the amount received in excess of the fair market value will be charged to tax the company as income from other sources.
According to the deliberations, the inter-ministerial board, under the department of industrial policy and promotion, would certify a start-up whether it is eligible for income tax and angel tax exemptions.
Normally about 300 to 400 start-ups get angel funding in a year.
Earlier, Central Board of Direct Taxes has directed the taxman not to undertake coercive steps in recovering pending taxes from start-ups under a specific provision of the Income Tax Act.